Short sale, foreclosure or new home?

June 3, 2013

Home buyers today have many choices - they can buy a foreclosure, a short sale or a used home. They can also choose to build a new home; with this there are many more choices to make which I will cover later in this article. Each has some advantages but some may have some major hidden costs involved. Let's look at each one and see what you decide at the end.

Buying a short sale or foreclosure sounds like a bargain; let's look a little closer. The national average to bring a foreclosure back to good condition is $107,600. These is not counting the selling price of the property and keep in mind that many of these homes are in high crime areas, which will affect the future value of the home. To be a bargain these must really be cheap and all are sold "as is." Short sales are complicated in another way as well. The list price of a short sale is just a guess on the Realtor's part as the bank won't, in most cases, disclose what they will accept for the home. Getting an offer accepted is another issue altogether. Many homes in short sale have multiple offers and the bank drags it out as long as a year to get the most favorable offer. You can be tied up for 2 to 12 months waiting and find out the house was sold to another buyer.

New homes are always the safest bet for value, they come with a warranty and you are not living in someone else's dream home. It can have the options you desire. The first thing to consider is the builder, choose one that has years of experience. Most reputable builders are set up to do "end loans." Be very concerned if a builder needs you to take out a construction loan. This is done when the builder had little or bad credit and is not capable of funding the project. Builders' salespeople should be licensed real estate agents; some smaller builders try to skirt this. If a builder is skirting state licensing requirements, think of what they do to cut costs when they build a home.

What you expect when you choose a builder for your next home:

* Price includes the home site and all permits, prep costs and fees

* Only $1,000 deposit needed. Builder should use own money not a construction loan.

* Closing costs paid when using the builder's preferred lender

* On site superintendent

* Licensed professional agents at every model

* 10 year limited warranty

* In house closing coordinator and warranty manager

These do not even include the many included features that should be at no extra charge, such as double pane thermal insulated low E windows, contemporary wood window sills, brushed nickel fixtures and door handles, pull down attic stairs, 5 1/4-inch baseboards, ceiling fans, 200 amp service cased openings and much more.

The choice is clear - build a new home with a good builder, after all "the good life deserves a great home."

Bill Panebianco is the sales manager for Adams Homes, Fort Myers Division. He can be reached at 239-278-5766 or bpanebianco@ADAMSHOMES.COM